The German economy may soon slide into a recession due to the protracted fight against inflation. Apart from skyrocketing consumer prices, Germany is dealing with the energy crunch, which is fueling inflation. The CPI Index has already soared to the highest level on record. Yet, the ECB has been unable to make positive shifts so far.
A recession is looming on the horizon, Minister for Economic Affairs Robert Habeck pointed out. He believes Germany might be facing the threat of a recession in 2023 if the ECB fails to slow down galloping consumer prices. However, Habeck is sure that the country still has a chance to avoid a recession. To do so, Germany needs to cut energy prices and bolster demand.
"Germany must fully utilize its fiscal policy to preserve the economy and keep business and industry investments," the official stressed.
Earlier, some large German enterprises reported that they may shut down their operation due to rising gas prices. Energy prices are likely to remain high in the long term, Robert Habeck concluded.
